New York Sues Exxon for Misleading Investors on Climate Change Risk

Reuters | 25 October 2018

New York’s attorney general sued Exxon Mobil Corp. on 24 October, alleging that the world’s largest oil company for years misled investors about the risks of climate change regulations on its business.

The suit, filed in New York Supreme Court, New York County, seeks undisclosed damages, a court order for a review of the company’s representations, and that the company corrects “numerous misrepresentations” to investors.

It alleges Exxon assured investors it had properly evaluated the effect of climate regulations on its business using a “proxy cost” for the likely effects of future events on its business. However, these proxy figures frequently were not used in its internal planning or cost assumptions, the suit claims.

The company also failed to properly account for such costs in determining its volume of oil and gas reserves, or whether to write down the value of its assets, a metric important to investors, the suit claims.

“The company claimed to be factoring the risk of increasing climate change regulation into its business decisions,” Attorney General Barbara Underwood said in a statement. “Yet, as our investigation found, Exxon often did no such thing.”

Exxon “looks forward to refuting these claims as soon as possible and getting this meritless civil lawsuit dismissed,” said spokesman Scott Silvestri in a statement.

He further described the suit as the “product of closed-door lobbying by special interests, political opportunism, and the attorney general’s inability to admit that a 3-year investigation has uncovered no wrongdoing.”

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